CBRE’s 2017 Class A office forecast hit the proverbial “bullseye”
Last year, our forecast model estimated -150,000 sq. ft. of Class A negative net demand, while actual absorption registered -214,000 sq. ft. of losses.
CBRE Research is forecasting +800,000 sq. ft. of Class A net absorption for 2018
Our current forecast model projects 2018 Class A net absorption in a range between 650,000 sq. ft. and 950,000 sq. ft.
Model outputs are based on key inputs and assumptions
Job growth, sublease expirations, net occupied deliveries, and major lease expirations are included, while assumptions used in the model include expectations for local economic momentum and sq. ft. demanded per new job.
Potential improvements and limitations shouldn't be glossed over
We ascertain the addition of a momentum element to the 2018 forecast will more accurately model Houston’s office real estate cycle. Long-term trends and a limited relationship between demand and job growth are limiting factors.